Excise duty on reprocessed spaghetti used for vermicelli manufacture upheld where no destruction or remission applied.

Excise duty was payable on spaghetti removed from the storeroom for reprocessing and used in the manufacture of vermicelli. The goods were not treated as unfit for consumption or marketing, and there was no claim for destruction or remission of duty. Their clearance therefore attracted duty under Rule 9(1) read with Rule 49 of the Central Excise Rules, 1944. Circulars and authorities relied on by the assessee were held inapplicable on these facts, and the duty demand was upheld.

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Issues: Whether excise duty was payable on spaghetti removed from the storeroom for reprocessing and used in the manufacture of vermicelli exempt from duty.

Analysis: The removal was not treated as a case of goods being unfit for consumption or marketing, nor was there a claim for destruction or remission of duty. The goods were taken out of the storeroom, reprocessed and used in the manufacture of vermicelli, which was chargeable to nil rate of duty. In such circumstances, the clearance attracted duty under Rule 9(1) read with Rule 49 of the Central Excise Rules, 1944. The circular and authorities relied upon by the appellant were held to be inapplicable on the facts.

Conclusion: Excise duty was payable on the spaghetti, and the demand was upheld.

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